Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

Perhaps I could say my piece again, just so he didn’t misinterpret it. Of course they care about inflation, and of course they care about whether we are going to competently deliver acceptable inflation outcomes over time. My only point was to say that even if you gave them clarity on an objective at a certain horizon, in quantitative terms, fundamentally they would still want to know how you are going to achieve that, and you are still going to leave unmet their principal demand. Of course they care about inflation, and we care about inflation. But I believe that the differences they are concerned about today—a central tendency that has a 50 basis point spread on it—are small compared with the uncertainty that they would like us to resolve about how we are going to react to stuff. What they really want is something that I don’t think we can fundamentally give them. They really want more certainty than we have at any given time about how we are going to react to a changing world, and they would like us to resolve the mystery in what the future will hold about the evolution of the economy. It is important to recognize that. But you are right, of course they care about inflation and how we’re going to react to inflation.

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